Answers:
Concept of TOWS matrix:
TOWS matrix - A modern tool for situation analysis
SWOT analysis, i.e., analysis of the company’s Strength, Weaknesses,
Opportunities, and Threats, was a popular model. This, however, fails to look at it in a combined way. For example, how does the opportunity of not having a bakery similar to Sambhavi in other districts (an opportunity) combine with Sambhavi’s strength? To service the customers in these districts, you need to have good logistics which Sambhavi does not have (weakness). Combining these, we can say that Sambhavi can give up the opportunity because of the weakness or make up the deficiency and make use of the opportunity.
- SO – When strength and opportunity match, the possibility of success is the highest. Thus lack of good bakeries in the neighbouring districts which is an opportunity when combined with the customer base from the neighbouring districts becomes a winning combination.
- WO – In this combination, one has to do something to overcome the weakness. Market need for good bakeries in the neighbouring districts is high but Sambhavi has to overcome its deficiencies in logistic capability if it has to leverage the opportunity.
- ST – Increasing cost of raw materials is a worry but since the products are unique and not cost sensitive, the business can take on the challenge though it needs to look at ways of reducing the threat by looking at alternative raw materials, innovation in ingredients, better negotiation with the suppliers which is possible if the quantity of purchase increases, etc.
- WT – Increasing cost of raw materials demands scientific purchase, inventory levels, and negotiation but Sambhavi does not have a professional management to do it which increases the negative impact of the threat.
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